The Supreme Court on March 22 denied certiorari to a group of doctors challenging the denial of business expense deductions for life insurance premium payments and to a couple challenging the IRS's denial of their offer in compromise.
A group of doctors and their spouses, the doctors' professional corporations, and a partnership deducted the amounts paid for life insurance premiums for the doctors as ordinary and necessary business expenses. The IRS denied the deductions, and the Tax Court upheld the denial, finding that the deductions were not ordinary and necessary business expenses under section 162. On appeal, the Second Circuit affirmed the Tax Court in a per curiam opinion, citing the reasons stated by the Tax Court. The group of doctors and their entities then petitioned the Supreme Court for review, arguing that the Second Circuit ignored long-standing precedent by looking at their subjective intent to minimize taxes in denying the deductions. The Supreme Court denied certiorari. V.R. DeAngelis M.D.P.C. et al. v. Commissioner, Sup. Ct. Dkt. No. 09-895 (Mar. 22, 2010), 574 F.3d 789 (2nd Cir. 2009)